Vol 17 (2020) - Issue 5

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Sevilleja v Marex Financial Ltd [2020] UKSC 31

Synopsis
The Supreme Court has recently considered the socalled 'reflective loss' principle, which in certain circumstances prevents shareholders from bringing claims against third parties, and has narrowed the scope of that principle considerably. Following this decision, the principle will apply in only very limited instances, namely to bar actions that are: (i) brought by a shareholder against a third party, (ii) in respect of loss which the shareholder has suffered in that capacity in the form of a diminution in share value or distributions, (iii) where that loss is the consequence of loss sustained by the company, and (iv) in respect of which the company has a cause of action against the wrongdoer.